A Distress Property Primer

access_time

Many buyers ask me about buying foreclosures or short sales thinking they are the “best” deals. I have helped buyers, particularly investors, make great below market acquisitions but just because a home is a foreclosure or short sale does not mean it is a great value. And, more importantly, depending on your situation and goals, distress property may not be the right type of property to consider.

Below is a brief review of the pros and cons of foreclosures and short sales. I also have some comments on court ordered sales, another type of distress sale but one that is not as prevalent as the other two.

Contract Changes Coming January 1

access_time

The standard sales contract used by Realtors in Northern Virginia, DC and the Maryland suburbs will be changing as of January 1. Our contracts and forms have always changed over time and most changes are of minor consequence. However, this revision includes a change that drastically alters the way a home is conveyed.

I have always felt that our contract was fairly balanced between buyers and sellers. There were terms in the in the contract that buyers didn’t like and others that bothered sellers but when each side has a little pain, it is probably fair. This latest major revision includes a significant seller friendly modification.

In the new contract, there are lots of the usual minor semantic changes like substituting “legal expenses” for “attorney fees” and adding that all definitions of time are based on east coast time. But the big one

Prep The House For Sale and Get a Tax Deduction – Use The Habitat ReStore

access_time

Recently, we added extra insulation to our attic. Prepping for that job meant removing items that were stored there. I realized there were many boxes of “stuff” that had been there since we moved in. And there were boxes of items our parents had given us while likely cleaning their attics, garages and basements. Plus, there were things put there “temporarily” until we got around to donating them. Same in your house?

Or are you starting a kitchen or bath remodel and need to dispose of old cabinets, fixtures or appliances?

Or are you thinking of selling soon and need to get the house ready?

The Habitat For Humanity ReStore can

Should I Use My Realtor’s Home Inspector?

access_time

Almost all purchase contracts contain a contingency for a home inspection. And those that don’t, really should. There are some contract contingency clauses that are marginal. In a multiple offer situation, some of these may be passed over to make your contract more attractive. The home inspection contingency should not be on that list. Even in a foreclosure or short sale when you can not ask the seller to execute repairs, you still need a home inspection contingency. In that case the contingency will contain wording that if the inspection reveals conditions you can not deal with, you have the right to void the contract.

So that leads to the question of how to pick an inspector.

Price a Home at Market or Price High and Negotiate?

access_time

At my listing appointments, I encounter sellers who take two different approaches to setting prices.

One says, “Let’s price at market, create activity and get the job done.” The other says, “Let’s start high. Everyone wants to negotiate and we can always come down. Maybe someone will pay our price. No way to know unless we try.”

Both want the best price. Who is right?

First Time Buyers – 100% Financing Is Back

access_time

A few years back, there were several 100% or no money down financing programs available. Many were quite dangerous, had adjustable rates or negative amortization and were a major contributor to the housing crisis. The 3 programs I will examine in this article are all 30 year fixed rate programs and much safer. One is from a local bank, one from the Virginia Housing Development Authority (VHDA) and one is from a credit union.